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Nation, World Sports

What the Supreme Court's sports gambling decision means

| Monday, May 14, 2018, 12:27 p.m.
People watch coverage of the first round of the NCAA college basketball tournament at the Westgate Superbook sports book in Las Vegas. The Supreme Court has struck down a federal law that bars gambling on football, basketball, baseball and other sports in most states, giving states the go-ahead to legalize betting on sports.
John Locher/AP
People watch coverage of the first round of the NCAA college basketball tournament at the Westgate Superbook sports book in Las Vegas. The Supreme Court has struck down a federal law that bars gambling on football, basketball, baseball and other sports in most states, giving states the go-ahead to legalize betting on sports.

On Monday, the Supreme Court ruled in favor of New Jersey in the case that was formerly known as Chris Christie vs. NCAA (Christie's name has been supplanted by Phil Murphy, the state's new governor), striking down a 25-year-old federal law known as the Professional and Amateur Sports Protection Act (PASPA) that largely outlawed sports betting outside of Nevada.

The court overruled a decision from the Third Circuit Court of Appeals, saying PASPA violates the state's 10th Amendment rights, thereby creating a path for New Jersey and other states to offer sports betting.

"Congress can regulate sports gambling directly, but if it elects not to do so, each State is free to act on its own," the opinion reads. "Our job is to interpret the law Congress has enacted and decide whether it is consistent with the Constitution. PASPA is not."

So, what's this all mean for sports betting and the nation moving forward?


Question: What happens first?

Answer: New Jersey has been preparing in earnest for legalized sports wagering since 2012, and many locations are ready to move quickly. Monmouth Park — a racetrack on the Jersey Shore — says it could open betting windows within the next two weeks.

 

It could take other states weeks, or even months, to follow New Jersey's blueprint, if they choose. One exception is Delaware, said Daniel Wallach, a sports gaming law expert and attorney at Becker & Poliakof, noting that the state already as infrastructure in place and doesn't require any legislative tweaks.


Q: Which states will be next?

A: Many state legislatures have been working on bills in anticipation of the Supreme Court's ruling, and many were waiting to see whether the court would strike down PASPA entirely. Many places have already concluded their 2018 legislative sessions, which could mean state lawmakers can't address the matter until next year.

While New Jersey and Delaware could have betting windows open soon, states such as West Virginia and Mississippi are also poised to move quickly. States such as Pennsylvania and Connecticut could be racing to get in the game, as well. Nearly 20 states have introduced bills that could legalize sports betting, and a 2017 report from Eilers & Krejcik Gaming estimates that as many as 32 states could offer legal sports betting within the next five years.


Q: What sports will I be able bet on?

A: The Supreme Court opinion means states can offer the same betting options as any other sports books, including college and professional sports, horse racing, golf, combat sports and non-American sporting events.


Q: Is there anything I won't be able to bet on?

A: Some sports leagues have urged states to ban some prop bets, primarily the situational variety that can be easily impacted by a single player or decision without necessarily altering the game's outcome.

Washington Nationals starting pitcher Stephen Strasburg throws a pitch against the Arizona Diamondbacks during the seventh inning of a baseball game Saturday, May 12, 2018, in Phoenix.

Photo by AP

 

For example, the leagues don't want to see betting lines offered on which player will commit the first foul of a game, or whether the first pitch of a game is a ball or strike.

Most sports books are likely to offer single-game bets, over-under bets, prop betting, teaser bets and parlays, as Nevada sports books do.


Q: Will mobile and online betting be available?

A: Many bills are encouraging mobile and online betting options. Without these options, gambling advocates warn that bettors will still turn to offshore accounts and illegal bookmakers.

New Jersey sports books will be able to take bets via phone or computer, but not right away. There will be a licensing process that could take weeks — possibly a few months — before books will be able to take bets remotely. Even then, only intrastate wagers will be permitted.


Q: Can I place in-game wagers?

A: Like many of the details, in the absence of federal legislation, this ultimately could vary from state to state. Some of the proposed bills specifically allow for in-game betting, such as those in West Virginia and New York.


Q: I already have accounts with DraftKings and FanDuel. Will they offer sports betting?

A: Many expect both these companies — the two giants in the world of daily fantasy sports — to quickly jump into this space and offer a large menu of sports betting options. They already have much of the infrastructure in place, and a long list of users familiar with their platforms.

Sites like DraftKings should profit from the Supreme Court's decision.

Photo by AP

 

In the meantime, those companies could still partner with specific casinos or venues, particularly on the mobile and online side of the business.


Q: Are the pro sports leagues happy about this?

A: In 2012, the five biggest sports entities in the United States sued to prevent New Jersey from entering the sports gaming business. But since then, some have altered their stance. The NBA and Major League Baseball have both said some form of legal sports gambling seems inevitable, and have teamed together to urge states to pass bills that would help protect the integrity of their sports — while also directing some profits in the direction of the leagues.

While all of the leagues will likely take on added costs — education, monitoring and investigations, for example — they could also stand to make plenty of money through new partnerships and business opportunities.

A man sits at a cubicle watching a simulcast horse race at the Monmouth Park racetrack in West Long Branch, N.J.

Photo by AP

 


Q: What about the NCAA?

A: The world of college sports, relying on amateur student-athletes, has been resolute in its opposition of sports wagering.


Q: There has been talk that the leagues will want a percentage of the money wagered? Is that happening? Does it impact bettors?

A: Major League Baseball and the NBA have proposed states mandate a 1 percent kickback to the leagues for assuming added risk. They liken to this to an "integrity fee," or a "royalty to the league." Some states have balked and the leagues have expressed a willingness to take less than 1 percent.

Some gambling advocates say cutting into sports books' profits with such fees could force them to offer tighter odds, which could push bettors back to the illegal markets to make their wagers.


Q: How big is the sports gambling industry?

A: While it's probably impossible to accurately estimate, experts suggest that illegal betting in the United States is a $50 billion to $150 billion business — perhaps significantly more.

According to research by UNLV's Center for Gaming Research, legal sports betting in Nevada totaled nearly $5 billion last year, led by football — both college and professional — which accounted for $1.76 billion.

 

A 2017 report from Eilers & Krejcik Gaming estimated that legal sports gambling could be a $6 billion industry — perhaps as much $16 billion if more states eventually get onboard.


Q: Could this lead to corruption or scandals?

A: That has certainly been the big fear, which has prompted the leagues to dig in their heels on this issue for so long. The leagues know they'll have to take on added costs to educate players and monitor betting trends to guard against any suspect activity.

But gambling advocates are quick to point out that sports gambling already takes place on a massive scale, meaning the leagues are already vulnerable to corruption.


Q: What happens to that federal law that largely banned sports betting outside of Las Vegas?

A: Even with PASPA struck down, Congress could still move to establish federal guidelines that would produce uniformity from state to state.

On Dec. 7 — the same day the Supreme Court heard oral arguments in the case — Rep. Frank Pallone Jr., D-N.J., introduced the Gaming Accountability and Modernization Enhancement Act, or GAME Act. His proposal doesn't set federal guidelines, per se, but it does aim to remove obstacles and provide the legal framework for states to adopt sports betting.

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